LMC’s data shows that passenger vehicle sales outperformed the overall light vehicle market, with sales of locally made models in July growing by 12.8% on a year ago, to 1.12 million units. Although the growth rate was down on the year-to-date figure of 16% achieved in the first seven months of this year, the company says this is still a good extension of the trend seen over the previous few months, with locally made passenger vehicle sales increasing by 12.9% year‐on‐year in 2013Q2.

SUV and compact car segments continued to lead passenger vehicle growth. SUV sales accelerated again in July, with 0.23 million locally made SUVs moved, up 43% from a year earlier. Meanwhile, the compact car segment, the largest segment in China’s PV market, continued to gain ground. Sales of locally made compact cars reached 0.51 million units in July, rising by 19.4% year‐on‐year, well above the passenger vehicle average growth of 12.8% in the month. This structural change reflected that dual‐engines, which are in replacement demand in coastal areas and for first‐time purchases in vast inner land areas, continued to fuel the momentum of China’s passenger vehicle market.

In contrast, light commercial vehicles fell in July, down 1.6% on the previous year to 0.32 million units. Since the SAAR (Seasonal Adjusted Annual Rate) announced a new high selling rate in June, LMC adds that it believes LCV sales were pushed up by carmakers at the end of 2012 Q2 in order to achieve better results in that quarter, and this was paid back in July with slower sales.

LMC added that the prospects of China’s light vehicle market in 2013H2 appears brighter than in the previous few months. The company said: ‘On the economic side, positive signs have been seen from industrial output and exports in July. More significantly, the stabilizing of economic development has become a top priority of macro‐economic policies, which we expect would benefit current car purchasing sentiment.’

The inventory situation has also improved recently. The China Automobile Dealers Association’s dealer inventory index stood at 1.53 at the end of June, decreasing for the second month in a row. Compared to the inventory index of 1.98 over the same period last year, the current inventory depth provides more room for sustainable growth for the rest of this year.

Commenting on the emergence of possible car purchasing limits in some tier‐2 cities as one of the major risks for China’s light vehicle market in the upcoming years, the company said such limits would, however, become a positive factor for car sales in the short term as widespread rumours would very likely push forward potential future purchases.